Breakdown of BUK valuation - just for you, sunnySunny, you speak with a tone of confidence, but the lack of substance backing up your statements makes your comments weak.
First off, the fully diluted share count, after all the warrants and options and the whole nine yards is 157 million shares . No one's ever said any differently. It's been laid out in black and white in the latest press release. Maybe you didn't bother to read it? "Bridge now has: a total of 99,425,890 common shares outstanding; warrants to acquire 52,084,206 common shares, at a price of 95 cents per common share; and options to acquire 5.48 million common shares outstanding"
"It's called dilution". What a profound statement... now tell us what that means in terms of numbers.... Awwww, heck let me do it for you...
The math is pretty simple.
We'll use the $60 million per year in free cash flow (that's after planned debt repayments) that people keep referring to, even though that number is probably low, given where UK gas prices are going.
157 million shares fully diluted... yes, but if you're going to use that number you have to give the company credit for all of the cash that the warrant and option exercises will bring in. That warrant+option cash is going to be about $50 million, roughly.
Now you have all you need to talk value from a cash flow standpoint...
At $1.40, the fully diluted market cap is $220 million (157 million shares x $1.40 per share).
But if you want to know what people are paying for Durango, you have to take out the cash component of that... let's assume that ALL of the working capital is burned up and we only adjust for the warrant+option proceeds...
$220 million - $50 million (warrant+option cash) = $170 million
Remember that Durango cash flow is $60 million per year.
So, quite simply, we're trading at less than 3x cash flow on a fully diluted basis, which is completely reasonable... not to mention that if gas prices are 1/3 higher than what the company used in their economics (I think they used $7.50/mcf gas), then BUK would be trading at about 2x cash flow. Most companies trade around 5-6x cash flow if you're not up to speed on that kind of thing. Bridge will probably trade at a discount to that, since Durango will only last for about 3-4 years, but 3.5-4x cash flow would be reasonable given the growth potential and flat production profile of 30 million of gas a day plus 1,000 barrels of condensate. How many juniors actually have cash flow in the North Sea? Answer: Not many.
Of course, all of the above places no speculative value on North Piper or Aspen, both of which will be drilled later this year with 2-3 wells per year drilled thereafter with the Durango cash flow.
Are you starting to get it? It's about growth, and not just growth, but internally funded growth... if there's any more dilution, it'll be because the company has made a discovery and wants to develop something new.
Aspen alone could be 3 times the size of Durango, and could be tied in just as easily... not to mention that Aspen will test a new deeper play that Chattyc alluded to. If the deeper play works, it's a whole new ball game and we're not even talking North Piper yet.
North Piper is huge. It will be drilled, has to be drilled. The speculative value that one could place on Piper is significant. Maybe $1.50 or more per share could be attributed to North Piper alone leading into results, given the size of the target (500 mmbbls recoverable) even if they farm some of it out.
So sunny, son, it's not unrestrained enthusiasm, it's about a company that is at worst fairly priced at current levels and possibly still undervalued by 100% if you attach some speculative value to the undrilled targets. Nobody's presuming a 20 bagger, but it's possible if North Piper hits... how many companies do you know of that have good core value that could give you 1000-1500% returns with limited (if any) downside risk?
As for when all of that financing paper hits the market, I'm sure a few of those owners will let some stock go, but by then they'll have seen North Piper results and all of them will do the math that I just did above. They might let a few shares go, but most I imagine will recognize that they're holding shares in a story that is solid and offers huge upside, even if Piper misses. Aspen alone could double production and could probably be onstream by next summer if they hit on that one.
Come back in 6 months and see if this was all unrestrained enthusiasm. Or better yet, stick around and back up your concerns with numbers so that you can actually illustrate your case and back up your views.